Skip to content
ChatProjectCodes

4 - Erroneous AbatementThe timely filed TC 150 return for TY 2018 is determined to be a nullity. The valid taxpayer filed a return reporting tax of $.00 and withholding of $2,500 which posted as a TC 976. Form 14039 is included with the return. The ASED for the valid return is expired. Based on the original return, the account shows TC 150 tax of $5,000, and withholding of $6,000. A CP 2000 proposing a tax increase of $2,000 based on unreported income is issued to the valid taxpayer’s last known

Example:

Internal Revenue Manual Part 25. Special Topics · 2026-10-03 edition · updated 2026-10-04 · United States

The tax year 2021 module currently reflects an EIP 3 issued with the following credits posted:• TC 766 CRN 338 for $1,400.00• TC 766 CRN 257 for $2,800.00The valid taxpayer’s 2020 return filing status is Head of Household with two allowable dependents and an AGI of $118,250. The taxpayer and dependents all have valid SSNs. The following actions will be taken to correct the account based on the valid taxpayer’s return information:Calculate the reduction percentage:$118, 250 - $112,500 = $5,750$5,750 ÷ $7,500 = 0.767 (76.7%)Calculate the amount of the credit:$1,400 × 3 = $4,200$4,200 (maximum credit) × 76.7% (reduction percentage) = $3,221.40The taxpayer is entitled to EIP 3 in the amount of $978.60 ($4,200 - $3,221.40)The adjustment input to correct the EIP 3 will include:• CRN 338 for $1,400.00-• CRN 257 for $1,821.40-

When the IDT case is for TY 2019 or TY 2020 and may affect the calculation or issuance of Advanced Child Tax Credit (AdvCTC) payments, a determination of impact must be made prior to following the procedures below. Refer to the table below for exceptions to procedures based on the determination of impact:

Determination of Impact

Exceptions

(1) There are no AdvCTC payments on the module

None

(2) All AdvCTC payments were issued to the valid taxpayer

None

(3) All AdvCTC payments were issued to the invalid taxpayerORThe valid and invalid taxpayers both received at least one AdvCTC payment

The appropriate IDT closing indicator must not be input until the AdvCTC payments are resolved. These indicators cannot be input until the taxpayer is no longer harmed by the IDT issues. Refer to IRM 25.23.2.6, Closing Identity Theft Issues, for additional information.

Required case closure correspondence must not be issued prior to the completion of all account actions. Refer to IRM 25.23.4.18.1, General IDTVA Letter Procedures, for additional information.

The CII case must remain open until all necessary actions have been taken. Follow procedures in IRM 25.23.4.21.2.1, ARPA - Advanced Child Tax Credit (AdvCTC) - Identity Theft Research and Account Actions, to ensure AdvCTC payments are addressed appropriately.

Get a plain-English answer with a citation back to this text.

Ask AI about this code
Export this section
▸Contents — Internal Revenue Manual Part 25. Special Topics
Internal Revenue Manual Part 25. Special Topics

GoCodebook provides public access, search, citation, multilingual explanation, and practical interpretation of legally adopted building regulations. It is not a substitute for the official ICC or California code publications.